How Much Should CPAs Get Paid?

Gen X'er here. I started out in the 90's with the stories everyone has and worked my way up to manager at KPMG. Left in '99 and started a firm. We have done everything to be the un-accounting firm. I believe there are a lot of us that enjoy the work and really enjoy having good clients that appreciate our service. It can be done without the crazy hours and bad stigma that we all have seen.

We currently have a team of 12 and only 60 clients. With that, we get to provide a high touch service and really help people. With the exception of 1 person, nobody has worked more than 20 hours of overtime in any 12 month period over the last 10 years. Outside of tax season our entire team works a 9/80 schedule with every other Friday off. And for the little overtime worked, we do pay 1.5X.

For anyone willing to go against the grain and build something great, we are a testament to the fact it can be done.

For anyone looking for a place to work that values their personal life and a team that lives out these values, give us a shout, we'd love to talk to you.

The profession needs to pay more while also getting much more bodies in firms to be able to reduce the work hours. I worked at a Big 4 that wouldn’t pay for OT unless it was over 48 hours and approved by the partner. You’d be paid for 40 hours. From 40-48 would be unpaid and being a “team player”. That’s just one easy way to increase their margins and pockets. I’m glad that I worked on an engagement that I saw the charge out rates for the project because now, after being laid off by the same firm twice (when my son was born and a year later when my wife was getting off mat leave), it’s given me the confidence to charge those rates or even higher in my own non-CPA firm. (Although I got my MBA in Accounting, I didn’t finish the CPA requirements in Canada because they wouldn’t count my self-employment as work experience and several other red tape issues.)

The industry pay structure is busted. Having been in the industry now for 8 years and starting my own firm, the aging generation of partners and equity members in firms are used to being able to make the bulk of their money off the backs of underpaid staff.

Now in an age of rising costs, I am seeing at my current firm partners refusing to raise their rates to any semblance of a market rate because they are afraid of losing clients, despite not having raised fees in over 10 years. Compounding on the problem, they also refuse to update systems to gain any cost efficiencies.

I work in consulting where I can yield a higher rate and when I got hired at my current firm earlier this year, they had to pay a market rate for me and my specialized credentials. Now there is some tension over my charge rate as a manager being higher than certain partners.

I've learned it's easier now to work independently to make more. If you are going to be working over 40 hours a week, may as well be lining your own pockets instead of enabling an older generations of partners to line their coffers.

The low pay trend is crossing lots of industries. Auto mechanics complain a lot about pay also. Inflation is defiantly outpacing salaries in most industries. Not much you can do about it if you are not willing to run your own business. Personally I think most accountants are overpaid. I have owned a few businesses over the years and my experience is accountants suck. It is such a pain point I am planning to open an accounting firm probably in 2024. This hourly rate thing is stupid. I pay $200 per hour to get pretty bad service and results. The accounting services model is broke.

70k is good for entry-level in a MCOL. The real game is to make the job so good that they will never want to leave. The more experience they get, the more efficient your firm will be. That's why you'll want to throw in those 3 weeks vacation + 1 week PTO.

For me personally (gen x) the tax season grind was worth it for a slow summer and fall. Since Covid I think we’ve lost that slower time. Perhaps that is why the conversation seems more prevalent now?

One... million.... dollars

What’s created these pipeline issues is the current generation of partners, who are mostly 5-10 years from retirement, and how they’ve mismanaged the pyramid scheme that public accounting is. Fees haven’t kept up with market costs over the years, and partners want to continue to make more themselves, so the non-equity team members have taken the beating via stagnation of wages. I remember in 2009 in undergrad we had a regional firm’s manager come into one of my classes and talk about everything PA at the time, notably his $100k salary as a recently promo’d manager. In today dollars that’s roughly $145k!! I can speak from experience, there’s experienced managers at RSM barely over the $100k mark today. There’s a lot of talk on how to fix our pipeline issues, and everyone loves to throw out making it easier/cheaper to become a CPA (which is an awful idea), but that’s just a smokescreen for what the real issue is - wages. If we as an industry paid our people like other licensed professional service industries do, we’d be in a much better spot when it comes to talent and retention.

I am currently doing cpa pathway as a 30year old mom. I would be lying if I didn’t say this video is somewhat discouraging. I didn’t realize cpa wages were that low…and am reconsidering tbh

15 years here, millenial, worked at one firm that entire time and became partner for 3 years until going out on my own this year. The "old school" ways have ruined our industry. There seems to have been a race to the bottom for pricing and being terrified to loose a client. Now we are seeing the supply amd demand that is allowing us to raise rates to where we can truly balance things, as you stated. Intoo am working amd planning to not have my staff work more than 40 hours all year. I HOPE I can keep myself near 50 hours this next spring. FINGERS CROSSED. LOL

I was hired out of college in 2008 at $45k and raised to $51k in my first three years. Got my CPA in that period. How little starting salaries have moved, with everything that's changed, is crazy. But then, $70k was what a region firm offered me as a "beginning manager" back in 2015. I think firms have gotten away with reduced wages for a long time, especially post-recession.

I’m Gen Z currently working full time while doing full time master in accounting and study for cpa exam it’s a nightmare

Great video, Logan.

Curious how the poll would break down by generation. I’m Gen X and suspect that those thinking that salary was fine would mostly be Gen X and Boomer. I thought it was fine.

I wasn’t okay with the hours earlier in my career but there didn’t seem to be options in public for lesser hours. Candidly, I think Millennials got it right in questioning the sweatshop model. We X’ers just complained about it.

Recent streak of videos has been all hits no misses

I made $23/hour when I started at a regional CPA firm. That said, I was paid overtime for hours over 8 in a day and double time over 12 in a day...which happened quite frequently...